Monday, August 10, 2009
Do I Need Amend The Trust When Assets Change?
DO I NEED TO AMEND MY TRUST WHEN MY ASSETS CHANGE?
This is a very common question by clients, and the answer is very simple:
A trust is designed to hold your assets in title to avoid probate on your death. During the course of your lifetime, the assets you own may change. You will sell property and buy other property. You will close bank accounts and open other accounts.
None of these actions affect the terms of the trust, so an amendment is not required. What is required is for you to make sure those assets are titled in the name of the trust. If you have any questions, ask your estate planning attorney or contact me for guidance.
A similar question is asked about the schedule of assets that is usually found in the last pages of the trust declaration or trust agreement. This schedule is often referred to as Exhibit "A" or by some other name.
Exhibit "A" is only a listing of what is intended to be in the trust at the time the trust instrument is executed. Merely listing the assets on the schedule doesn't effect a transfer to the trust, it merely states an intention.
So, since it is not a material part of the trust, the trust is not required to be amended simply because the assets on the schedule have changed.
Trust amendments are required when material terms of the trust have changed. For example, changing the successor trustees or changing the beneficiaries.
Dwight Edward Tompkins, Attorney at Law
This blog is intended for informational and educational purposes only, and is not a substitute for legal advice from a qualified attorney in your jurisdiction.
I help people protect their families through affordable, personalized estate planning. Tompkins-Law.com I am in solo practice in Orange County, California where I focus on estate planning, family trusts, living trusts, wills, corporations and business succession planning. I speak Spanish and serve the latino community. Fideicomisos-Testamentos.com